UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11 - K
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
(Mark One)
(X) Annual Report Pursuant to Section 15(d) of the Securities Exchange Act of
1934
For the fiscal year ended December 31, 2003
Or
( ) Transition Report Pursuant to Section 15(d) of the Securities Exchange
Act of 1934
For the transition period from ____________ to
Commission file number: 0-21318
A. Full title of the plan and the address of the plan, if different from
that of the Issuer named below.
O'Reilly Automotive, Inc.
Profit Sharing and Savings Plan
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
O'Reilly Automotive, Inc.
233 South Patterson
Springfield, Missouri 65802
REQUIRED INFORMATION
The following audited financial statements are being furnished for the
O'Reilly Automotive, Inc. Profit Sharing and Savings Plan (the "Plan"):
1. Statements of Net Assets Available for Benefits as of December 31,
2003 and 2002.
2. Statement of Changes in Net Assets Available for Benefits for the year
ended December 31, 2003.
EXHIBITS
Exhibit No. Description
----------- --------------------------------------------------------
23.1 Consent of Independent Registered Public Accounting Firm
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of
1934, the trustees (or other persons who administer the employee benefit plan)
have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
O'REILLY AUTOMOTIVE, INC.
PROFIT SHARING AND SAVINGS PLAN
By:/s/ James R. Batten
------------------------------
Executive Vice President and CFO
O'Reilly Automotive, Inc.
Financial Statements and Schedule
(Modified Cash Basis)
O'Reilly Automotive, Inc.
Profit Sharing and Savings Plan
December 31, 2003 and 2002, and the year ended
December 31, 2003
with Report of Independent Registered Public Accounting Firm
O'Reilly Automotive, Inc.
Profit Sharing and Savings Plan
(Modified Cash Basis)
Financial Statements
and Schedule
December 31, 2003 and 2002, and the year ended
December 31, 2003
Contents
Report of Independent Registered Public Accounting Firm........................1
Audited Financial Statements (Modified Cash Basis)
Statements of Net Assets Available for Benefits................................2
Statement of Changes in Net Assets Available for Benefits......................3
Notes to Financial Statements..................................................4
Supplemental Schedule (Modified Cash Basis)
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)................10
Exhibit Index ................................................................11
O'Reilly Automotive, Inc.
Profit Sharing and Savings Plan
Report of Independent Registered Public Accounting Firm
The Plan Administrators and Participants
O'Reilly Automotive, Inc.
Profit Sharing and Savings Plan
We have audited the accompanying statements of net assets available for benefits
(modified cash basis) of the O'Reilly Automotive, Inc. Profit Sharing and
Savings Plan (the Plan) as of December 31, 2003 and 2002, and the related
statement of changes in net assets available for benefits (modified cash basis)
for the year ended December 31, 2003. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
As described in Note 1, the financial statements and supplemental schedule were
prepared on the modified cash basis of accounting, which is a comprehensive
basis of accounting other than accounting principles generally accepted in the
United States.
In our opinion, the financial statements referred to above present fairly, in
all material respects, information regarding the Plan's net assets available for
benefits (modified cash basis) as of December 31, 2003 and 2002, and changes
therein (modified cash basis) for the year ended December 31, 2003, on the basis
of accounting described in Note 1.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedule (modified
cash basis) of assets (held at end of year) as of December 31, 2003 is presented
for purposes of additional analysis and is not a required part of the financial
statements but is supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. This supplemental schedule (modified
cash basis) is the responsibility of the Plan's management. The supplemental
schedule (modified cash basis) has been subjected to the auditing procedures
applied in our audits of the financial statements and, in our opinion, is fairly
stated in all material respects in relation to the financial statements taken as
a whole.
/s/ Ernst & Young LLP
-----------------------
Kansas City, Missouri
June 8, 2004
1
O'Reilly Automotive, Inc.
Profit Sharing and Savings Plan
Statements of Net Assets Available for Benefits
(Modified Cash Basis)
December 31,
2003 2002
--------------------------------
Assets:
Investments, at fair value (Note 3) $81,848,066 $58,676,893
--------------------------------
Net assets available for benefits $81,848,066 $58,676,893
================================
See accompanying notes.
2
O'Reilly Automotive, Inc.
Profit Sharing and Savings Plan
Statement of Changes in Net Assets Available for Benefits
(Modified Cash Basis)
Year ended December 31, 2003
Additions:
Dividend and interest income $ 439,661
Contributions:
Rollovers from other plans 701,629
Employer 3,127,834
Employee 4,737,728
-------------
8,567,191
=============
Net realized and unrealized appreciation
in fair value of investments (Note 3) 20,020,028
-------------
Total additions 29,026,880
Deductions:
Distributions to participants (5,855,707)
--------------
Net increase 23,171,173
Net assets available for benefits,
at beginning of year 58,676,893
--------------
Net assets available for benefits,
at end of year $ 81,848,066
==============
See accompanying notes.
3
O'Reilly Automotive, Inc.
Profit Sharing and Savings Plan
(Modified Cash Basis)
Notes to Financial Statements
December 31, 2003
1. Summary of Significant Accounting Policies
The following is a summary of the significant accounting policies of the
O'Reilly Automotive, Inc. (the "Company") Profit Sharing and Savings Plan (the
"Plan"):
Basis of Presentation
The accompanying financial statements have been prepared on the modified cash
basis of accounting, which is a comprehensive basis of accounting other than
generally accepted accounting principles. Under this basis, contributions are
recorded when received rather than in the period to which they relate, and
expenses are recorded when paid rather than when incurred.
Valuation of Investments
The value of investments in common and collective trusts, registered investment
company funds and O'Reilly Automotive, Inc. common stock is based on quoted
market values received from SunTrust Bank, Central Florida, N.A. (SunTrust) on
the last business day of the plan year. Participant loans are valued at their
outstanding balances, which approximates fair value.
Administrative Expenses
The Plan pays all administrative expenses.
Use of Estimates
The preparation of financial statements requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
4
O'Reilly Automotive, Inc.
Profit Sharing and Savings Plan
(Modified Cash Basis)
Notes to Financial Statements (Continued)
2. Description of the Plan
The following description of the Plan is provided for general information only.
Participants should refer to the plan agreement for a more complete description
of the Plan's provisions.
The Plan is a defined contribution pension plan providing retirement benefits to
substantially all employees of the Company who have attained age 21 and
completed six months. and The Plan is sponsored by the Company and is subject to
the provisions of the Employee Retirement Income Security Act of 1974 (ERISA).
The Plan allows participants to contribute up to 100% of their annual
compensation to the Plan up to $12,000. The Company has elected to contribute
50% of each employee's voluntary contribution up to 2% of the employee's
compensation and 25% of the next 4% of each employee's voluntary contribution.
Additionally, the Company may make voluntary contributions to the Plan annually,
as determined by its Board of Directors, up to a maximum aggregate company
contribution of 15% of participants' annual compensation. Participants are
eligible for these voluntary contributions after at least 1,000 hours of service
in a 12 consecutive month period of employment. All employer contributions are
invested in the O'Reilly Automotive, Inc. Stock Fund. Participants may elect to
allocate their contributions to their account balances in various equity, bond
or fixed income funds or the O'Reilly Automotive, Inc. Stock Fund, or a
combination thereof. During the year ended December 31, 2003, the Plan received
discretionary contributions from the Company amounting to approximately
$2,300,000, not including matching contributions.
Each participant's account is credited with the participant's contribution and
an allocation of the Company's contribution and Plan earnings. Allocations of
Company contributions are based on participant contributions and compensation.
Allocations of Plan earnings are based on participants' account balances.
Forfeitures of terminated participants' non-vested accounts are applied to
administrative expenses and employer contributions. Total forfeitures at the end
of 2003, amounting to $487,408, were first applied to administrative expenses
and then reduced employer contributions.
Participants are immediately vested with respect to their voluntary
contributions. With respect to employer contributions, participants become 20%
vested after two years of service with the Company. Vesting increases in 20%
increments annually to 100% after six years.
Participating employees are entitled to borrow from the Plan the lesser of
$50,000 or 50% of the employee's vested account balance at a rate equal to one
percentage point above the prime interest rate in effect, as reported in the The
Wall Street Journal, on the last business day of the
5
O'Reilly Automotive, Inc.
Profit Sharing and Savings Plan
(Modified Cash Basis)
Notes to Financial Statements (Continued)
2. Description of the Plan (continued)
month prior to the date the loan is made. Loans are repaid by payroll deductions
over a period no longer than five years.
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA. In the event of plan termination,
participants will become 100% vested in their accounts.
Benefit distributions are payable in monthly payments to the beneficiary or in a
lump sum, as elected by the participant. At December 31, 2003, and 2002,
terminated employees had approximately $39,645 and $212,352, respectively,
included in net assets available for benefits which were to be paid in 2004 and
2003, respectively. The Plan pays all administrative expenses. During 2003,
administrative expenses totaled $462,101 and are included in the net
realized/unrealized appreciation in fair value of investments in the
accompanying Statement of Changes in Net Assets Available for Benefits.
3. Investments
At December 31, 2003 and 2002, the Plan's investments are held by SunTrust, in a
bank-administered trust fund. SunTrust has authority for the purchase and sale
of investments based on participant discretion, subject to certain restrictions
as specified in the trust agreement and in ERISA.
The fair value of individual investments that represent 5% or more of the Plan's
net assets are as follows:
December 31,
2003 2002
------------- -------------
SunTrust common collective trusts:
Classic Balanced Fund $ 3,976,163 $ 3,588,094
Stable Asset Fund 9,814,175 9,137,535
Classic 500 Index Fund 5,945,203 4,268,155
Classic Investment Grade Bond Fund * 3,065,989
Registered investment company fund:
O'Reilly Automotive, Inc. common stock:
Participant Directed 45,201,043 29,033,640
* Below 5% threshold
6
O'Reilly Automotive, Inc.
Profit Sharing and Savings Plan
(Modified Cash Basis)
Notes to Financial Statements (Continued)
3. Investments (Continued)
During 2003, the Plan's investments (including investments purchased, sold, as
well as held, during the year) appreciated (depreciated) in fair value as
follows:
Net Realized And
Unrealized
Appreciation
(Depreciation) in Fair
Value of Investments
Year ended December 31, 2003 ----------------------
Stable Asset Fund $ 393,204
Classic 500 Index Fund 1,185,990
Classic Investment Grade Bond Fund (11,340)
Classic Balanced Fund 301,695
Classic Capital Appreciation Fund 342,837
Classic Life Vision-Moderate Growth 31,554
Classic Life Vision-Growth & Income 31,024
Classic Life Vision-Aggressive Growth 29,918
Franklin Small Cap Growth Fund 131,559
Fidelity Advisor Equity Income Fund 260,859
Templeton Growth Fund 96,954
Fidelity Advisor Equity Growth Fund 27,505
Janus Worldwide Fund 239,923
Classic Small Cap Fund 202,808
Classic Small Cap Growth Stock Fund 102,082
Classic Mid-cap Equity 131,540
Classic Value Income Stock Fund 225,908
American Century Value Advisor Fund 132,622
O'Reilly Automotive, Inc. common stock 16,163,386
-------------
$ 20,020,028
=============
7
O'Reilly Automotive, Inc.
Profit Sharing and Savings Plan
(Modified Cash Basis)
Notes to Financial Statements (Continued)
4. Income Tax Status
The Plan has received a determination letter from the Internal Revenue Service
dated September 9, 2003, stating that the Plan is qualified under Section 401(a)
of the Internal Revenue Code (the "Code") and, therefore, the related trust is
exempt from taxation. Subsequent to this issuance of the determination letter,
the Plan was amended. Once qualified, the Plan is required to operate in
conformity with the Code to maintain its qualification. The Plan Administrator
believes the Plan is being operated in compliance with the applicable
requirements of the Code and, therefore, believes the Plan as amended is
qualified and the related trust is tax exempt.
5. Related Party Transactions
Certain Plan investments are shares in registered investment companies managed
by SunTrust. SunTrust is the Trustee as described by the Plan and, therefore,
these transactions qualify as party-in-interest transactions.
6. Risks and Uncertanties
The Plan invests in various investment securities. Investment securities are
exposed to various risks such as interest rate, market and credit risks. Due to
the level of risk associated with certain investment securities, it is at least
reasonably possible that changes in the values of investment securities will
occur in the near term and that such changes could materially affect
participants' account balances and the amounts reported in the statements of net
assets available for benefits.
8
Supplemental Schedule
(Modified Cash Basis)
9
O'Reilly Automotive, Inc.
Profit Sharing and Savings Plan
Schedule H, Line 4i
Schedule of Assets (Held at End of Year)
(Modified Cash Basis)
December 31, 2003
Identity of Issue, Borrower,
Lessor, or Similar Party Number of Shares Cost Current Value
-------------------------------------------- ------------------ ------------ --------------
SunTrust common and collective trusts*:
Stable Asset Fund $ 6,888,509 $ 9,814,175
Classic Investment Grade Bond Fund 3,082,840 3,210,891
Classic Balanced Fund 3,537,306 3,976,163
Classic Capital Appreciation Fund 2,276,391 2,147,746
Classic Small Cap Fund 608,712 834,932
Classic 500 Index Fund 5,513,202 5,945,203
Classic Mid-Cap Equity 591,211 640,548
Classic Small Cap Growth Stock Fund 339,093 396,591
Classic Value Income Stock Fund 1,219,427 1,257,395
Classic Life Vision-Moderate Growth 265,893 284,343
Classic Life Vision-Growth & Income 191,833 208,286
Classic Life Vision-Aggressive Growth 172,380 187,382
Registered investment company funds:
Fidelity Advisor Equity Income Fund 1,130,702 1,240,965
Fidelity Advisor Equity Growth Fund 161,330 181,961
Franklin Small Cap Growth Fund 515,032 540,373
Templeton Growth Fund 1,674,154 1,769,495
American Century Value Advisor Fund 571,196 663,367
O'Reilly Automotive, Inc. common stock* 1,172,226 22,123,886 45,201,043
Participant loans (interest rates ranging
from 5.00% to 10.5%) -- 3,347,207
------------ ------------
$ 50,863,097 $ 81,848,066
============= ============
* Party-in-interest to the Plan
10
O'Reilly Automotive, Inc.
Profit Sharing and Savings Plan
EXHIBIT INDEX
Exhibit No. Description
----------- ----------------------------------------------
23.1 Consent of Ernst & Young LLP
11
O'Reilly Automotive, Inc.
Profit Sharing and Savings Plan
Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 33-73892) pertaining to the O'Reilly Automotive, Inc. Profit Sharing and
Savings Plan of our report dated June 8, 2004, with respect to the financial
statements and schedule of the O'Reilly Automotive, Inc. Profit Sharing and
Savings Plan included in this Annual Report (Form 11-K) for the year ended
December 31, 2003.
/s/ Ernst & Young LLP
---------------------
Kansas City, Missouri
June 23, 2004